Some consumers have urged the government to speed up the proposed law to allow pension fund members to use the pension fund savings as a guarantee to obtain a loan.

The Pension Fund Amendment Bill will make it easier for working South Africans affected by COVID-19 restrictions to access loans for up to 75% of their fund balance. The bill is currently before parliament for approval.

COVID-19 lockdown restrictions have left millions of South African consumers under more financial pressure. Household debt has spiralled out of control and many are more than three months behind with their monthly credit repayments. Now the Pension Fund Amendment Bill has given some a glimmer of hope.

The South African Pension Fund Law discourages members to access their pension fund savings during their productive years. This is largely because the majority of South Africans rely on the state grant during their retirement years.

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Some experts are concerned that the proposed Pension Fund Amendment Bill would mean that more South Africans will burden the state.

Pension Fund expert, Elias Masilela says the proposed law must be accompanied by a plan to replace the drawdown benefits.

Masilela says financial institutions have an important role to play for the plan to succeed.

As more over-indebted South Africans wait with bated breath for the government to shed more light about the proposed law, attempts to obtain comments from the National Treasury have not been successful.

However, hopes remain high that this bill will soon be signed into law.

Treasury rejects suggestions that it intends to amend the Pension Fund Act